A few Questions...

[rakellu]

Hello. I am Rachel, a 14 year old student from Scotland who chose to study Bitcoin for my Economics project. I have spent a long time reading articles and getting to know how Bitcoin works. To be honest, after hours of reading I still only have a basic understanding of the system!

I chose Bitcoin as my project topic because the concept interested me. Here I saw something that began less than a decade ago come from being worth almost nothing to over $1000 per BTC and I was curious about how it gained it's value so quickly.

Straight to the point, I would be extremely greatful if you guys could answer several questions that would help me strengthen my project.  

1. What exactly do you consider bitcoins as; a currency, commodity, or something completely different?

2. Do you see Bitcoin competing with fiat currencies ($) in future?

3. Do you see Bitcoin as a potential Global Reserve Currency?

4. In general, what do you see Bitcoin achieving/becoming in the next few decades?

Any opinion would be greatly appreciated.

Thanks for your time!

Rachel  

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[Tron]

First, excellent topic choice.

>> What exactly do you consider bitcoins as; a currency, commodity, or something completely different?

Bitcoin is not easily classified.  It has elements of a commodity like gold, and elements of a currency like the Euro.   Let me explain:

The easy divisibility, ability to easily exchange bitcoin, and an agreed upon value make Bitcoin a currency.

The scarcity and ownership properties of bitcoin make it more like a commodity.

Bitcoin (capital 'B'), the software protocol, also has properties that are completely different than anything that has ever existed, which makes it very interesting to watch how it will be used.

>> Do you see Bitcoin competing with fiat currencies ($) in future?

Yes, but not any differently than Gold and Silver compete with fiat currencies today.  As various governments expand their money supply to get themselves out of trouble, bitcoin, like gold, provides a good safe haven.   'Printing money' or the more politically correct term of 'quantitative easing' is really just a tax on the savers.   After all, if it was just 'free money', why would we need jobs.


>> Do you see Bitcoin as a potential Global Reserve Currency?

The technology Bitcoin does have that potential, but governments that benefit from the status quo will likely try and prevent it.  You see this already with governments making public statements about what Bitcoin can and can't be in relation to their own banking system.

Yes, it's possible.


>> In general, what do you see Bitcoin achieving/becoming in the next few decades?

It will continue to be attacked and maligned by some and championed by others.  But the core breakthrough which combined a number of great ideas together into a working protocol for issuing, safely storing, and transferring value is now with us.  It's not going away.

It will do to Banking (HSBC, Chase, Bank of America), remittance networks (Western Union), and existing payment systems (Visa, Mastercard, PayPal) what the Internet has done to the media empires (TV, Newspaper, Magazines).  It will force them to adapt, disappear, or render them irrelevant.   It will also act as a safety net for citizens of governments that debase their money.

For those reasons, I think each bitcoin (the currency/commodity) will continue to gain value, as more people and businesses around the world use Bitcoin (the transmission network) to store and exchange that value.

Tron
CEO, CoinCPA

[Bonam]

Straight to the point, I would be extremely greatful if you guys could answer several questions that would help me strengthen my project.  

1. What exactly do you consider bitcoins as; a currency, commodity, or something completely different?

2. Do you see Bitcoin competing with fiat currencies ($) in future?

3. Do you see Bitcoin as a potential Global Reserve Currency?

4. In general, what do you see Bitcoin achieving/becoming in the next few decades?

Any opinion would be greatly appreciated.

Thanks for your time!

1. The goal of bitcoin is to be a currrency and to be used as such.

2. Yes, it will compete with fiat currencies. The extent to which it will compete is hard to know. But by definition, if any transactions are conducted in bitcoins that would otherwise (were it not for the existence of bitcoin) have been conducted in fiat, that means bitcoins are competing with fiat.

3. It seems unlikely, nations with powerful currencies will want to maintain their influence. And bitcoin is a long long way from having the adoption and scale necessary to be used like this, even apart from any interference by governments.

4. Predictions for the "next few decades" are hard... accelerating technological change will radically transform almost all aspects of society. But in the next few years, the hope is that bitcoin will continue to see growing adoption and that it will be possible to conveniently pay for everyday expenses such as gas, restaurants, groceries, utilities, etc, with bitcoins. If this happens, the value of bitcoins should also become much more stable, in turn making it more appealing for even further adoption. If we see this happen, then I think bitcoin can be called a success at that point. If in 10 years bitcoin is still where it is today.. just a handful of online businesses dealing with it, most of which are scams, then I think it will be correct to assume that it is just a curiosity, failing to achieve what people hoped for it.

[rakellu]

First, excellent topic choice.

>> What exactly do you consider bitcoins as; a currency, commodity, or something completely different?

Bitcoin is not easily classified.  It has elements of a commodity like gold, and elements of a currency like the Euro.   Let me explain:

The easy divisibility, ability to easily exchange bitcoin, and an agreed upon value make Bitcoin a currency.

The scarcity and ownership properties of bitcoin make it more like a commodity.

Bitcoin (capital 'B'), the software protocol, also has properties that are completely different than anything that has ever existed, which makes it very interesting to watch how it will be used.

>> Do you see Bitcoin competing with fiat currencies ($) in future?

Yes, but not any differently than Gold and Silver compete with fiat currencies today.  As various governments expand their money supply to get themselves out of trouble, bitcoin, like gold, provides a good safe haven.   'Printing money' or the more politically correct term of 'quantitative easing' is really just a tax on the savers.   After all, if it was just 'free money', why would we need jobs.


>> Do you see Bitcoin as a potential Global Reserve Currency?

The technology Bitcoin does have that potential, but governments that benefit from the status quo will likely try and prevent it.  You see this already with governments making public statements about what Bitcoin can and can't be in relation to their own banking system.

Yes, it's possible.


>> In general, what do you see Bitcoin achieving/becoming in the next few decades?

It will continue to be attacked and maligned by some and championed by others.  But the core breakthrough which combined a number of great ideas together into a working protocol for issuing, safely storing, and transferring value is now with us.  It's not going away.

It will do to Banking (HSBC, Chase, Bank of America), remittance networks (Western Union), and existing payment systems (Visa, Mastercard, PayPal) what the Internet has done to the media empires (TV, Newspaper, Magazines).  It will force them to adapt, disappear, or render them irrelevant.   It will also act as a safety net for citizens of governments that debase their money.

For those reasons, I think each bitcoin (the currency/commodity) will continue to gain value, as more people and businesses around the world use Bitcoin (the transmission network) to store and exchange that value.

Tron
CEO, CoinCPA

Thanks Tron for the reply. I agree with many of the points you make. After seeing Mt. Gox collapse and Bitcoin recover so quickly I agree that Bitcoins will stay around.


Rachel

[rakellu]

Cheers for the reply Bonam, I guess only time will tell! 

[R0yalAir]

2. Do you see Bitcoin competing with fiat currencies ($) in future?

I do see Bitcoin as the next dollar.

[moxl]

Bitcoin is next dollar in the world